Hello cows, goodbye sheep

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Southland sheep numbers have dropped by nearly 30 per cent to 4.1 million in the past five years, compared with 19 per cent nationally, says Beef + Lamb NZ.

The news comes after Statistics New Zealand released its provisional agricultural production census this week, showing national sheep numbers have dropped by 7.3 million to about 30 million since the last census in 2007.

During the same period, the national dairy cattle herd has increased by 1.2 million and now stands at 6.5 million - a 23 per cent increase from 5.2 million.

Beef + Lamb New Zealand economic service executive director Rob Davison said Southland was one of the fastest-growing dairying regions in New Zealand and the dairy expansion was displacing sheep and beef. In 2007, Southland recorded 5.7 million sheep which has this year dropped to 4.1 million, he said.

Dairy conversions displace sheep because they take the land that they graze, Mr Davidson said.

Federated Farmers Southland dairy chairman Allan Baird said the sheep industry was not generating sufficient income for farmers, resulting in more converting to dairy.

"I see it as farmers looking at the future and being realistic, and the sheep industry hasn't really performed in the last seven to eight years."

With the price of lamb forecast to drop below $100, sheep farmers might look at their options for dairying, he said.

Dairy NZ senior economist Matthew Newman said Southland dairy cows contributed to 8 per cent of the national herd and it was the second-fastest-growing dairying region in the country behind Canterbury.

The number of dairy cows in Southland last month was about 540,000, up from 350,000 in 2007-08, he said.

At a milk price of $6.30, about $1.3 billion of revenue was generated for Southland farmers annually, Mr Newman said.

The region's dairy cow herd had increased by nearly 40,000 for each of the past five years, while more than 3000 Southlanders were employed on dairy farms.

Statistics NZ agriculture statistics manager Hamish Hill said national dairy numbers had been booming in the past five years.

"The extra production equates to about 370 two-litre bottles of milk a year for everyone in the country," he said. "Dairy's obviously been a big mover, and the sheep number has fallen."

Statistics NZ is not expected to release its full regional figures until May 2013.

The census was conducted in partnership with the Ministry for Primary Industries.